Refunds

     Long, long ago, though in this galaxy, I had as a friend a bright and enterprising fellow who enjoyed science fiction as much as did (and do) I. We parted company upon graduating high school and went our separate ways: I into the hard sciences, he into other sorts of studies and undertakings. Time passed and the contact between us gradually attenuated.

     Several decades later, we found ourselves spontaneously back in touch. He had gone into a field that I would not have imagined even in its vaguest outline. He styled himself a futurist. He vended his counsel to governments and other large organizations that sought to prepare for what is yet to come. From all appearances he’s done well for himself. Needless to say, I’m happy for him.

     But this idea of a special occupation whose practitioners advise others on preparing for the future has always troubled me, for a single reason: Anyone can be wrong about what’s to come. After all, it hasn’t happened yet. It might not happen “on schedule.” Indeed, it might not happen at all.

     We often speak casually about “the foreseeable future.” It’s an indistinct phrase for an indistinct concept, much like those other shibboleths of the venturesome, “educated guess” and “calculated risk.” (In the most common cases, the “educated guess” has nothing to do with the guesser’s education, and a “calculated risk” is inherently insusceptible to genuine calculation. Ask your favorite statistician.) The future cannot be known to a sufficient degree of exactitude to foresee anything of substance. What we speak of “foreseeing” arises from our awareness of trends and incentives. But these things, which are surely valuable things to know about, are not inexorable. Trends come to an end. People sometimes defy our notions about the incentives before them. Humility about this “foreseeing” business is mandatory.

     Now, as my friend has indeed done well for himself, he must have compiled a strong record of predicting accurately enough for his customers to rely upon his counsel. That’s all to the good. But I can’t help but wonder if he ever offered a refund to a customer he’d advised inaccurately or unwisely.

     Long ago but still in this galaxy, I wrote a long essay about “market failure” and those who prattle about it. I reproduce it here for your perusal.

     Yes, yes, your Curmudgeon is embarking on another of those crusades. The idea of this one is to provide rhetorical ammunition to readers who, confronted by a strident leftist (with or without a pre-printed sign or SEIU T-shirt), would like to know how to deflate his representations for the benefit of any third parties who might be listening. (It’s essentially guaranteed that the leftist won’t be swayed; such persons live their whole lives behind a fact-proof screen.) The freedom advocate often starts from unsatisfactory premises, or hasn’t thought through the arguments for his position to ensure that he has adequate command of the subject in the clutch. In consequence, he stumbles before the onslaught of repetitions, falsehoods, tendentious assertions of “rights,” and moral condemnations that power-worshippers have made their principal weapons.

     After all, there’s only so much you can do with a sneer and a Smith & Wesson.

     Let’s start from here: According to a highly placed fear-monger, some 47 million Americans “haven’t got health care.”

     BZZZT! Wrong, Mr. Socialist Flackster, but thank you for playing. What’s that? You prefer to be called “Mr. President?” Well, your Curmudgeon prefers to be called “Maximum Thunder Stud,” but we can’t always get what we want, now can we? At any rate, the figure is wildly incorrect from several perspectives. Its key term, “health care,” is undefined. The 47 million figure includes illegal immigrants, young adults who disdain to purchase medical insurance, and persons in a delimited transition between one source of coverage and another. Worse, it implies that there’s someone, somewhere in this country, that a doctor would refuse to treat on the grounds of inability to pay, which is flatly untrue.

     A figure far more relevant to the current debate over whether Washington should be permitted to impose federal control on medicine and medical insurance would be the number of Americans who persistently and involuntarily lack medical insurance for reasons of cost. That number is estimated to be far lower, on the order of 9 to 13 million. Even that would conceal some important aspects of the situation. For example, consider the inanity of expecting routine, infrequent, relatively inexpensive doctor’s-office visits to be paid for by insurance: an expectation that arose only about thirty years ago and has never made sense. Yet that expectation and its common fulfillment have added enormously to the aggregate cost of medical care in these United States.

     But our Socialist-In-Chief has an agenda which accuracy, honesty, and candor would disserve. So he continues to hammer the 47-million-lack-health-care message, on Hitlerian Big Lie principles.

     The agenda is rationing.

     Rationing is a specific practice: the imposition of authoritarian controls upon the allocation of a scarce commodity. When rationing is in force, Smith and Jones are not free to trade the rationed commodity; allocation authority Davis decrees who shall have how much, and has the force of the State at his disposal to see to it. In effect, the allocation authority seizes all rights over the rationed commodity, regardless of the wishes of its producers and consumers, and reapportions them according to its own criteria, whether those be “fairness” and “effectiveness” or political advantage.

     Rationing only makes sense as a short-term emergency measure. It applies to circumstances where some vital commodity temporarily cannot be increased in quantity by production or importation: a drifting lifeboat with only so much food, or a community isolated by an ice storm with only so much fuel. It’s clear in such cases that the necessities of life must be carefully conserved, to maximize everyone’s chance of making it through the period of shortage — and equally clear that while those conditions last, the allocation authority has the power of life and death over everyone in the community.

     In a socialist or fascist economy, where the State decrees what goods and services will be produced, and at what prices, it would be fair to say that all commodities are rationed. After all, the State can’t have you increasing the availability of some pre-planned widget arbitrarily; that would screw up its spreadsheets, to say nothing of its reputation. Persons who did that in the Warsaw Pact countries were prosecuted for “practicing capitalism,” and were usually imprisoned for it. (Note also that the nomenklatura of those countries were granted access to sources of goods and services unavailable to less highly placed subjects. All animals were equal, but some were more equal than others.)

     In a capitalist economy, where all the goods desired by Man are freely and copiously produced every day, rationing is absurd, unthinkable. That the State should decree that Smith shall only make so much of X, and must turn it all over to the State Rationing Board, is a violation of Smith’s property rights. That the State should decree that X will be available to its subjects only in such-and-such quantity and at a fixed price is completely contradictory to the laws of supply and demand. Rationing does nothing for anyone’s well-being; it’s merely a political privilege sought by power hungry men for its own sake.

     But of such men there has never been a shortage. They seek to rationalize every imaginable extension of their power. Is X in current production? Is it being purchased freely by those with the means? Is its supply fluctuating according to demand? Well, then let’s frighten the people with talk about “market failure.”

     “Market failure” is a term we hear quite a lot these days. Yet its meaning is seldom elucidated. What does it mean to say that the market has failed with regard to commodity X? If X is being produced, and if those who desire it and can afford it are purchasing it at will, how can we speak of failure? If X is not being produced, because those who desire it are insufficiently numerous, or are unwilling or unable to pay enough to justify its production, is that a failure?

     Markets cannot fail. The notion is entirely without substance, for “the market” is not a conscious, purposive entity. The word “market” is merely convenient shorthand for the innumerable voluntary transactions (and decisions not to transact) that occur among individuals and institutions every day. Since the market has no purpose, it cannot fail to achieve it. The failure involved is on the part of the leftist who’s demanded results other than those the market has provided, and has failed to get them.

     To get you to buy into his notion of “market failure,” the leftist must persuade you that his notions about how much X ought to be produced, and at what price it ought to be sold, possess moral authority — that is, that someone is being deprived of his rights because of the “market failure” of which he complains. That’s near the core of the explosion of innovative claims of “rights” we’ve witnessed this century past. But the discussion of “rights” as applied to economic behavior will be deferred for the moment.

     The key point here is that he who demands that the market produce a particular result pertaining to some good or service seeks something he could never arrange by voluntary action. The possible reasons are many: they include cost, geography, scarcity of some required resource, unavailability of enough skilled producers, or lack of interest on the part of notional purchasers. But whatever the case, if he demands that the State step in and compel the result he seeks, he is advocating rationing.

     One of the fresher canards your Curmudgeon has stumbled over in recent days has been the assertion (by leftists, of course) that “the market is a rationing mechanism,” and so, by implication political rationing, enforced at the point of a gun, is just dandy. This is as vile a deception as you’re likely to encounter in current discourse. “The market” cannot compel anyone to produce, sell, or buy any item. “The market” cannot dictate the price at which an item will be sold, whether in a specific transaction or as a general condition. “The market” cannot forbid the production or consumption of any commodity on “public good” grounds. “The market” not only has no purpose; it also has no power. The State, in contrast, has nothing but power; it gets all its effects by violence and intimidation. The State can step between Smith and Jones and dictate the terms of their interaction. If they dissent, it can threaten them with fines, imprisonment, or death.

     Plainly, for the State to dictate anything about our economic intercourse is utterly antithetical to freedom. More, the third parties to whom your leftist adversary wants to give allocation authority would be immune from blowback. They would pay no costs for whatever decisions they might reach, yet would be in a position to dictate the terms of survival for everyone subject to their authority. The critical feedback loops that correct for bad decisions in a free market are absent from government rationing.

     We ought to have learned that lesson from the performance of our government-run schools, if not at Waco and Ruby Ridge.

     The leftist who prattles about “market rationing” must be hauled up short in exactly this manner.

     All arguments about economic considerations reduce to one of two sets of considerations: optimality or rights. Does authoritarian allocation — rationing — produce results that are objectively better than freedom, whether in a specific case or in general? If so, why? Is there practical, historical evidence to that effect? As far as your Curmudgeon knows, only in the case of overhead-cum-externality goods can that argument ever be sustained — and not even always then.

     When the Left fails at the optimality argument, it invariably reverts to rights. Indeed, leftist ingenuity at inventing ever newer claims of rights is the eighth wonder of the political world. But for Smith to claim that he has a right to commodity X implies either that X is freely available to all persons, or that someone else has an enforceable obligation to provide it to him. The former implication applies only to breathing air; the latter legitimizes slavery.

     Nothing we desire is truly free. Every material or informational good, every service, every improvement to the conditions of life comes at a price that someone must pay, whether in cash or with his labor. In this lies the ultimate justification for political liberty:

     That essay is one of the best arguments against government that I know of. Governments claim to operate in pursuit of “the public good,” an arguable commodity. (“Who is the public? What does it hold as its good?” — Atlas Shrugged) But while “we,” loosely speaking, can occasionally arrive at a consensus about “the public good,” government policies ostensibly imposed to pursue it frequently don’t do so. Sometimes the policy causes a visible diminution of what we consider “the public good.” Sometimes any gains in the good are countervailed by massive costs and losses in other areas. And sometimes there are unintended consequences that make us rear back in horror, muttering “Why didn’t we foresee that?”

     And atop those considerations, there is this: We never get a refund.

     The tradesman who goes wrong must offer a refund to preserve his reputation for honest dealing. Professionals – doctors, lawyers, and clergymen – distinguish themselves from other sorts by admitting up front that “Ours is not an exact science. We can promise you nothing but our best effort founded on our best knowledge.” By this declaration, they indemnify themselves against having to offer refunds, though not against the possible loss of reputation in the case of repeated failure.

     As I noted above, governments don’t give refunds either.

     This is on my mind for many reasons. Among them is the classic statement by David Bergland about the limits of what any conception can achieve:

     In Mackey Chandler’s riveting April series, the town-meeting-style government of the orbital nation of Home contemplates whether permitting dueling is a good thing. One of Home’s citizens rises to say something exceedingly pertinent to our era…indeed, to all eras: The comparison that matters isn’t between a society that permits dueling and some imagined state of perfect harmony. Rather it’s between one that permits dueling and one that forbids it. Dueling, the speaker continues, provides a way to redress wrongs that law should not and must not address. Are we generally better off with it or without it?

     The consensus of that society is to permit it. Even in the awareness that some duels will create a wrong rather than correct for one, overall permitting it strikes the people of Home as something they’d rather preserve than abolish by law.

     That is wisdom. That is humility in public policy. And it is notably absent from the ruling Establishment of our nation. If there’s a ruling elite anywhere that exhibits wisdom and humility, I’m unaware of it.

     I could go on, but I think the above will suffice for the last day of the Year of Our Lord 2022. It hasn’t been a good year. However, its lessons, when combined with those of 2020 and 2021, are striking in the extreme. They call to mind a pithy statement from an unnamed observer of Britain’s Parliament in the Nineteenth Century:

Nevertheless, in the inexplicable universal votings and debatings of these Ages, an idea or rather a dumb presumption to the contrary has gone idly abroad, and at this day, over extensive tracts of the world, poor human beings are to be found, whose practical belief it is that if we “vote” this or that, so this or that will thenceforth be. Practically men have come to imagine that the Laws of this Universe, like the laws of constitutional countries, are decided by voting. It is an idle fancy. The Laws of this Universe, of which if the Laws of England are not an exact transcript, they should passionately study to become such, are fixed by the everlasting congruity of things, and are not fixable or changeable by voting! [Cited by Herbert Spencer in The Proper Sphere Of Government]

     Add to this the pervasive corruption of our nation’s elections, and the complete indifference displayed toward it by the American judiciary. Can anyone justly say that what we endure conduces to “the public good?”

     Happy New Year, Gentle Reader. I’ll see you in 2023.